The bill, SB 27, aims to close a $6.2 billion gap between the Public Employees Retirement Association fund's assets and its unfunded liabilities over a 30-year period by increasing employee contributions to the plan and reducing benefits.
Public employees will see a reduction in annual cost-of-living adjustments for pension benefits from 3 percent to 2 percent and a 1.5-percent increase in their contributions to the fund.
Farmington officials said the phase-in period would help retain employees who otherwise might have retired.
"I commend the governor and the (association's) board for taking a serious approach to ensuring the long-term solvency of the (retirement) program," said City Manager Rob Mayes in a Friday phone interview.
City officials had been worried that the original plan to balance the pension fund would bring abrupt changes.
Potential consequences included the "forced retirement" of a number of city employees, including Police Chief Kyle Westall and much of the department's command, Mayes said in a December Daily-Times story.
Those fears have since subsided.
"The modifications made to the original, aggressive changes are much more palatable to the city and should mitigate the rule change forcing employees to retire prematurely," Mayes said.
The most substantial changes to the signed bill will affect new employees entering the workforce in the future, he said.
The city's finances, however, will take a hit.
A change in employer contribution means the city will have to raise its contribution to the fund by 0.4 percent, costing the city about $116,000 in the first year, Mayes said.
For Mayor Tommy Roberts, this additional financial obligation is cause for some concern.
The city will now have to find a way to budget for the increased contribution while trying to close a $4.4 million budget deficit.
"Going forward, all of this is in an environment in which we're looking for ways to deal with the budget, but I believe we can address those issues," he said during a Friday phone interview. "I appreciate that the (association) fund statewide was in bad shape and needed some fixes."
For San Juan County Chief Executive Kim Carpenter, the changes to the pension fund may only provide a temporary fix.
"We've obviously got concerns because we have a good percentage of people eligible to retire," he said in a Friday phone interview. "People are going to have to do some math and decide whether it's worth it to stay."
Carpenter said that he will be eligible for retirement as well as a number of department heads and middle management personnel.
"Now it's phased in, which will help, but at the same time, the real black sheep is this 90-percent recovery of retirement (funds) after 30 years," he said.
If an employee waits to retire until they hit 30 years of employment, they will jump from collecting 80 percent of their income to collecting 90 percent.
"With the phase in and the chance for the 90 percent, people will probably wait," Carpenter said. "But either way, you're going to have an eventual (employee) fallout. The big thing is that people need to get educated. Don't take the (fund) for granted. Look at the governor's reforms. A lot of people get to retirement and realize that their take-home is not what they expected."
Public employees, however, should be thankful for the bill and its reforms, he said.
"I think we should be thankful that they're talking about pension reform and not pension termination," Carpenter said.